Investing

Give Your Retirement Savings a Boost

Give Your Retirement Savings a BoostEven with the best planning, unexpected events can push your retirement savings off track. Divorce, job layoffs, and business setbacks are just a few common obstacles that can cause us to fall behind on savings. The sooner you can give your retirement savings a boost, the easier it will be to get back on the right path.

Give Your Retirement Savings a Boost

Review your accounts for unnecessary spending. Look for automatic charges from online subscriptions, credit cards, and other services you no longer need or use. Often, people aren’t even aware they’re still being charged for such services, and all those fees can add up.

Review insurance policies for possible savings. When our lives change, so do our insurance needs. There may also be new opportunities to bundle your policies (home, auto, life, et al.), which lets you maintain existing coverage for a lower combined premium. Click here to read about how to compare auto insurance.

Reconsider your other methods of saving. Qualified retirement plans generally allow you to save more money than nonretirement accounts because of their associated tax savings. If you have more than six months’ worth of expenses saved in your emergency account, consider moving the excess funds into a retirement account.

By |2022-12-19T11:44:40-07:00January 10th, 2023|Financial Planning, Investing, Retirement|

Gen Z Embracing the Power of Knowledge

Jacob Cavaleri - Gen Z Embracing the Power of KnowledgeA whole lot of us, myself included, fit into the category of Generation Z. Whether you’re 25 years old or halfway through fifth grade at age 10, you can claim the Gen Z title. We’re the first generation to grow up with social media and smartphones as part of our everyday life. While some people see that as a negative, one can’t help but admit it is a free stream of unlimited education. How is Gen Z embracing the power of knowledge?

This generation, more than others, is experiencing new things and new parts of life. For the older portion of Gen Z, that includes learning about money management and finances. While it may seem intimidating, understanding one’s full financial picture is actually empowering.

Personal finance involves much more than investing in stocks and bonds. It includes any debt you have, any assets, your job, your personal goals, and many other pieces. Did you just get into college or pick your major? That’s great. Now’s the time to begin thinking about a career path, income potential, and how your future could look. Did you just start your first job? Congratulations. What benefits does your employer offer?

Something I consistently see happening in Gen Z young adults is living beyond their means. Having fun and doing things you enjoy are crucial to being happy. At the same time, it’s important to consider the things that are not as fun yet are just as important to maintaining happiness in the long-term. For example, an emergency fund may not seem fun or exciting, but it’s an important thing to construct when getting started in life. A good target is setting aside three-to-six months of your expenses, so you don’t have to worry about money if (and, more likely, when) something unplanned happens.

On the positive side, a common trait among Gen Z is inquisitiveness and continuous learning. Friends often ask me about different things they can do with their money and for money management tips in general. That curiosity and eagerness to discover is admirable.

In many ways, our generation is just getting started. The journey is long, and we all have a lot to learn. Let’s enjoy the ride.

Click here to read about our financial planning process and philosophy.

By |2022-12-19T11:13:10-07:00December 27th, 2022|Current Affairs, Financial Planning, Investing|

Optimism in the Face of Economic Turmoil

Jim MailliardThe year 2022 has been rough for investors.  Even relatively conservative portfolios are down about 15 percent. A huge culprit has been red hot inflation, currently running at about 8 percent, according to economic consensus. Food and gas are running even higher. That contrasts with a long-term U.S. average inflation rate of 3.3 percent going all the way back to 1914. Inflation this high creates the expectation of higher interest rates, which we are now seeing across the board. That is historically bad for economic growth, stock returns, and the bond markets. Is it possible to maintain one’s optimism in the face of economic turmoil?

Despite this dreary synopsis, investors would be wise to stick with their long-term written plan, unless something significant has changed with their financial goals and circumstances. Successful bond money managers believe inflation is cooling at least a little. That would mean the Fed could slow their aggressive rate hikes, which would eventually be good for the bond market and provide investors with some relief.

As for stocks, there is also reason for optimism. John Lynch of Comerica Bank points out that since 1950, in the 12 months following a mid-term election, the S&P 500 index of large company U.S. stocks has risen an average of 15 percent with no down years.

The charts here contain monthly data from the Dow, S&P, and Nasdaq indices. You can see that, while the markets are down overall for the year, each received a nice bump up in October. This illustrates the importance of maintaining a consistent investment strategy.

Those who remain invested over the long-term historically reap the benefits of the anticipated upturn in the markets. Those who panic during a downturn and sell out of the markets often miss that opportunity.

Optimism in the Face of Economic Turmoil
Yahoo! Finance data; past performance does not guarantee future results.
By |2022-11-24T17:49:34-07:00November 29th, 2022|Current Affairs, Investing|

Smooth Sailing Tax Strategies

smooth sailing tax strategiesThe boat you stand in rocks and sways as the waves roll and churn and crash across the stern. That’s how it can feel when tax rules are up in the air, soon to change, or recently changed. If you’re a high earner or have a sizable portfolio, this unsteady feeling intensifies. Wouldn’t it be great to have smooth sailing tax strategies?

Many people make the mistake of leaving things “as is” when laws change,  leaving potential tax savings on the table. They don’t realize that there often are small adjustments  they can make before new rules take effect to lock in savings.

What if you viewed changes to tax law as an opportunity? The wealthiest Americans tend to embrace tax changes and find hidden savings as the tax tides ebb and flow. They ask questions.

  • How much of my income and which of my investments will be affected?
  • How can I use the current unpredictability around taxes to my benefit?
  • Are my investments still aligned with my tax strategies?
  • Is there a way to lock in savings now before rules change?

At Perspective, we ask and answer those questions for you. We recommend and help you implement solutions that best fit your unique situation. We do all this because being proactive can steady your tax strategy and provide greater peace-of-mind.

Smooth Sailing Tax Strategies

In the final three months of 2022, we’ll be focusing on tax-loss harvesting, portfolio rebalancing, and other techniques to help ensure you get the most out of your income and investments.

By |2022-09-23T15:22:38-07:00October 11th, 2022|Investing, Taxes|

Recession News (Sort of)

recession newsAre we in a recession? It depends on who you ask. Recession news can be complicated, especially in 2022.

The most common definition of a recession is two consecutive quarters of negative growth. The economy met that bar after the most recent report on gross domestic product (GDP), which showed the economy shrank in the first half of 2022.

Still, we won’t know whether we’re actually in a recession for several more months. Why? The official arbiter of recessions is the National Bureau of Economic Research (NBER), and its recession criteria depends on more data than GDP. To formally declare a recession, the NBER looks for a significant and widespread decline in economic activity that goes on for a while.

2022 Recession News

We may very well be in a recession. However, a mixed bag of positive and negative economic factors makes it weird and hazy.

On the positive side: The labor market remains strong, still creating plenty of new jobs. Consumer and business investment also is looking sturdy.

On the negative side: Inflation is obviously on everyone’s radar, as is the Fed’s latest interest rate hike.

Whether we’re officially in a recession or not, the economy is flashing some undeniable warning signs. Despite recent gains, we can expect more market volatility. That’s the cyclical nature of the economy and investment markets. Ups and downs are normal.

The best thing we can do is have faith in our proven investment strategy, stick to our written financial plans, and ride out the current storm.

Photo by Andrea Piacquadio via Pexels.com
By |2022-08-23T12:55:47-07:00August 31st, 2022|Current Affairs, Investing|